REPORT & ACCOUNTS
FULL YEAR ENDED 30th JUNE 2016
CONTENTS
Summary Information
Chairman’s Statement
Strategic Report
Report of the Directors
Report to Shareholders by the Board on Directors’ Remuneration
Corporate Governance
Statement of Directors’ Responsibilities
Directors and Advisers
Report of the Independent Auditor
Statement of Comprehensive Income
Statements of Changes in Equity
Statements of Financial Position
Statements of Cash Flows
Notes to the Financial Statements
Notice of Meeting
4
5-6
7-11
12-14
15-16
17-22
23
24
25-26
27
28-29
30-31
32-33
34-50
51-52
3
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER SUMMARY INFORMATION
Northamber plc and its subsidiaries are primarily distributors of computers, peripheral equipment and
related services to resellers who then sell on to the general public and corporations – the end users.
The company’s shares were admitted to trading on AIM a market operated and regulated by the London
Stock Exchange under stock symbol “NAR.”
The shares were formerly traded on the full listing of the London Stock Exchange
Summary of last five years’ trading
Revenue
(Loss)/Profit before tax
(Loss)/earnings per share
Net Assets per share
Dividends per share (net)
Years ending 30 June
2016
£’000
2014 2013
2012
2015
£’000 £’000 £’000 £’000
61,844
(1,233)
(4.38)p
67.9p
0.4p
65,452
(886)
(3.15)p
72.7p
0.6p
62,865
(1,155)
(4.10)p
76.4p
0.6p
77,521
(1,047)
(3.49)p
81.0p
1.05p
100,615
37
(0.01)p
85.7p
1.3p
4
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
CHAIRMAN’S STATEMENT
Results
As we continue our transition into more consultative, solution driven sales, I am pleased to be able to
announce an increase in gross profit to £4.8 million, driven by a gross margin (“GM”) improvement to
7.8%. This is a significant increase from just over 7% for the previous year, especially against a challenging
industry background and shows the traction we are making in evolving the business.
Unfortunately whilst margins increased, so did losses. This stemmed from increased administration
costs, of which recruitment was a significant contributor, as we invested in building our future presence
in these strategically important categories and sectors organically.
As we increased our focus on these higher margin solutions categories, we also moved away from some
of our lower margin more transactional business, leading to an overall reduction in turnover of some
£3.6 million to a total of £61.8 million compared with £65.4 million for last year.
We now look at the business as 3 mutually reinforcing units, namely: “Wholesale” which provides a
wholesale function for IT products: “Solutions” which focuses on a consultative approach to newer
IT technologies with a heavy value-add: and “Retail” which focuses on providing consumer goods to
national retailers.
The far more promising, newer technologies and higher margin added value areas, we labelled
“Solutions”, increased its GM year on year contribution significantly despite investment and staff
recruitment costs. This division is an area with a strong potential that we are focusing on heavily.
The Retail sector of our business which is driven by the strength of our experienced logistics and I.T.
systems is always subject to the vagaries of the retail industry demand generation focus. Whilst a
profitable contributor, it was nonetheless disappointing to experience a significant decline in revenue,
albeit with retained margins.
In order to fully benefit from the strategy of providing higher margin Solutions, we have made significant
investment in recruiting and training more experienced staff who can add value to very specialised
products and gain the additional levels of margin.Whilist we are confident that this strategy will prove
successful, and will be more fully reflected in the outcome for the current financial year, we cannot avoid
the impact of the additional staff recruitment fees.
The reported operating loss of £1.29 million, disguises an annual gross profit improvement of £218,000.
The increase in reported loss of £360,000 over the prior year is partly due to the previously advised
needs for key recruitment and associated costs. Those increased costs are included within the overall
figure of £578,000 over the prior year.
Balance Sheet
During these challenging times of significant movements in structure and profile, of both the industry,
our sector and consequently within our company, the need for conservation and control of finances
becomes ever more important and critical.
We have always been extremely careful in the management of our finances and assets, and have always
placed great emphasis on liquidity and cash
I am pleased to be able to state each year that our balance sheet continues to be strong, our liquidity
ratios more than adequate, our assets unencumbered and our cash balances positive. This year is no
different and with cash at the year- end standing at £5.4 million, it is almost exactly the same as at the
last year end.
Net Assets per share have inevitably declined to 67.9p per share (2015: 72.7p) although still well above
the average share price in the year.
5
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER Dividend
As always, the subject of dividend is complicated by the message it also sends. Your board has taken
particular consideration of the underlying improvement in the newer business areas, plus the strength
of our ongoing debt free, tangible asset base.
At a total cost of £28,159 your Board is proposing a final dividend of 0.1p per share .The dividend will be
paid on 18 January 2017 to shareholders on the register as at 9 December 2016.
Staff
Whilst we have maintained a lean management structure, it remains key that we continue our search for
the right individuals to drive our forward management strategy.
With an incredibly high percentage of long serving members of staff plus those more recently joined, I
am very grateful to all our staff for their support and focus.
Board
Geoff Walters, with his non-executive financial skills, has made a very welcome contribution to the
board in the role previously held by Gordon Hamilton.
Outlook
Although the forecast post referendum gloom has not yet happened, and hopefully will not be too
great if and when it does become reality, the short and medium term future is fraught with uncertainty.
In view of the history of the last few years I am, to say the least, cautious. We are hopeful that the moves
we have made in the profile and structure of the business will continue to develop the more profitable
sides of the business and that we shall be in a position to move towards profitability sometime in the
not too distant future, although I do not expect to reach that position within the next twelve months.
The company remains well placed to deal with both challenges and opportunities alike and the board
is confident that the change in direction will prove fruitful in the years ahead.
D.M.Phillips
Chairman
27 October 2016.
6
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 STRATEGIC REPORT
This report provides an overview of the company’s strategy, its business model and a review of how the
company has performed for the year. It also sets out the principal risks involved in its business and the
financial position of the company at the year end. There are also some comments and observations on
the future prospects for the company.
1. The Company’s Strategy
As explained below in the notes on the business model, the company is not directly involved with
the ultimate users of the products it sells. Acting as a hub through which manufacturers provide
products to resellers for sale to the ultimate end user.
This being the case requires us to develop strategies with both suppliers and resellers to satisfy the
needs of those ultimate users of the products.
Our strategy always has been to assess the requirements of the end users and then source quality
products and services from reliable brand named manufacturers and make them available to
resellers at the best prices in the most efficient time frame. With an ever changing product range
it has also been part of our strategy to support fresh new products which will be attractive to end
users.
In addition to the supply of hardware and software products we also ensure that our customers are
provided with the technical support either directly or through the suppliers which they may require
to effectively use the high tech products we sell. Thus ensuring quality of supply and satisfaction
to users.
2. The Business Model
The Group has, since its inception, been involved in the distribution of electronics and computer
related products. Initially this was predominantly printers but has been extended over the years to
include not only computers themselves but also a wide range of peripheral and ancillary related
products.
The Group has a two pronged approach in driving the business, being both demand driven and
supply driven. The demand drivers are the requirements of our customers where we strive to
provide a wide range of products and get them to the customer in the quickest possible time and at
acceptable prices. The supply drivers are the requirements of our suppliers – the vendors. Vendors
in the main are one of two types, there is the major brand type of supplier who is looking for us
to increase its turnover, to physically get them to the customer and bear the risk of the customer
defaulting. The second type of supplier differs only in that they tend to be the smaller producers,
who often develop new or innovative products and are looking for a method of reaching an
established wide ranging customer base which is beyond their own resources.
Our business model is to satisfy all those wants by providing a marketing and selling operation to
optimise the penetration of the products to the customers and a distribution facility which includes
warehousing and bulk breaking using sophisticated systems and procedures to achieve a first class
delivery service.
3. Key Performance Indicators
The group has an extensive management reporting system and uses a wide variety of information
in its everyday management of the business, including both those of a financial and non-financial
nature. This information is tailored to the various aspects of the business with individual managers
being responsible for variances in movements within their particular sphere of operations to the
executive management of the company. The majority of this information is highly sensitive and it
is considered by the directors that it would be commercially disadvantageous to the company to
identify the information used in a public document such as this Annual Report.
7
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER STRATEGIC REPORT (continued)
Some of the broader KPIs which are used and which have been reported elsewhere in our Annual
Reports are the following:-
Ratio
Revenue
Gross Profit
Stock Turn
Debtor Days
Format
£m
%
Times
Days
Good Debtors (Net Trade Receivables)
£m
Creditor Days
Net Assets per share
Working Capital Ratio *1
Days
Pence
Times
2015-16
2014-15
61.8
7.79
11.4
41
8.3
38
67.9
1.9
65.5
7.03
13.5
47
10.0
34
72.7
2.1
*1 Working Capital Ratio is calculated by adding Inventory and Net Trade Receivables, divided by
Trade Payables
Debtor days have decreased due to change of mix in customers with varying credit terms.
Net Assets per share have fallen due to dividend payments and the loss reported for the period.
4. Performance Review
For some time the company has been following a strategy of change away from the basic hardware
type products which are in the main physically larger type products with relatively low margin and
subject to great price pressure, towards more application intensive type products where there is
greater scope for adding value and gaining margin.
Although this process of change was already initiated in previous periods it was intensified in the
current year and particularly during the second half of the period. However such changes need
very careful planning and implementation to minimise the inevitable consequences which usually
includes not only significant costs upfront before the benefits of the changes are manifest but also
some tail off of some parts of the existing business.
There was a continuation of the move towards consolidation in some parts of the industry,
particularly in relation to those parts of the industry towards the ultimate consumer end of the
industry. This also impacted adversely on the company in the second half of the year, although
steps are being taken to also benefit from this consolidation effect elsewhere.
The underlying changes which have been and are continuing to be made to the structure of the
business will, it is anticipated, make significant improvements in both turnover and margins in due
course, although it will take a little time before they are seen to be fully effective and reflected in
results.
8
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 STRATEGIC REPORT (continued)
5. Financial Review and Position
Turnover decreased by £3.6 million compared with the previous year. The average debtor days
decrease from 47 to 41 and the average creditor days increased from 34 to 38.
As a result of the above, our cash balance at the end of financial year was the same as last year at
£5.4m whilst remaining debt free.
Some 41.8% of the Net Assets comprise the depreciated holding value of freehold properties, 28.6%
cash and the balance working capital. The Net Assets were 67.9p per share which represented more
than the highest share price of 44.0p in the year.
6. Principal Risks and Uncertainties
Financial Risks
The group uses various financial instruments, including cash, equity, trade receivables and trade
payables in the course of its operations.
The use of these instruments gives rise to risks associated with exchange rate risk, liquidity risk,
interest rate risk and credit risk. The directors review and agree policies to deal with each of these
risks as summarised below.
Exchange Rate Risk
The group purchases some of its products in foreign currency. Foreign currency purchases are
subject to close management supervision. The directors are informed regularly of the potential
impact of exchange rate movements on the business and act to mitigate any adverse movement
wherever possible. It is the group’s policy not to speculate in derivative financial instruments in
either sterling or foreign currencies, nor to hedge translation or currency exposures.
Liquidity Risk
The group seeks to manage financial risk of liquidity by ensuring it has sufficient cash resources
available to meet foreseeable needs at all times through cash flow forecasting.
Interest Rate Risk
The group’s exposure to interest rate risk is principally with its cash asset.
It is the policy of the Group not to have long term loans or other financial instruments except
in particular circumstances and when specifically approved by the board. There have been no
changes in the role of financial instruments during the year.
9
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER STRATEGIC REPORT (continued)
Credit Risk
The group and company’s principal financial assets are cash and trade receivables. The credit risk
associated with cash is reduced through deposits being split across a number of banks. The credit
risk arising from the group and company’s trade receivables is reduced through prescribing credit
limits for customers based on a combination of payment history and third party credit references.
Credit limits are reviewed on a regular basis in conjunction with debt ageing and collection history.
Other Principal Risks and Uncertainties
Other than the risks stated above and the marketing risk, which is addressed below, in the opinion
of the directors, the principal operating risks are as stated in the section on Internal Control on
page 21. The risks and uncertainties associated with the business model are set out below.
The model depends in part on working closely with the brand names in the industry as it is
often the products from these vendors which form the core of the business, and in part on the
development of new vendors particularly for the innovative products which are integral to the
IT industry. Co-operation with vendors is therefore key and this risk of attrition is addressed by a
combination of mutual co-operation with vendors on the range of products being offered, the
pricing of those products and the marketing of those products. The company’s continual search
for new and improved products, particularly in peripherals, from new vendors also improves the
range of products we can offer and thereby attract more customers to ourselves which enhances
our attraction to the vendors and reduces the risk of loss of vendors.
The existence of the group’s facilities such as the warehouse, the sales staff, the control systems
and not least the financial soundness of the company means that we can offer a distribution facility
which is quick and efficient, an attraction to both vendors and customers. The principal risks
involved in these requirements are that the warehouse could be destroyed or made inoperable –
the cost of such eventuality is of course covered by insurance, including loss of profits cover, but
the operation is such that alternative accommodation could quickly be brought into action, or
alternatively – a warehousing function could be subcontracted at very short notice. Although such
an event would have costs attached and would cause some disruption in the business, it would be
far from catastrophic.
All systems within the group, including the control systems, are backed up securely on a daily basis,
thus limiting the risk to one day’s operations. The financial soundness of the company is a matter
which is constantly in the minds of the senior staff and directors of the company. Systems are in
place to ensure that any deviation from the norm is immediately brought to the attention of staff
and directors. These systems have a proven history as shown in the strength of the balance sheet.
Not only has the company sufficient working capital to enable it to meet its requirements, but it
believes that it has an untapped resource in borrowing on its substantial assets should it require
to do so.
Market Risk
The group is subject to both general market conditions and particularly to those affecting its own
particular industry. The company is a distributor of other businesses’ products and is therefore
dependent on the suppliers of such products to continue to provide products which are required
by the customers of the company, at prices which are acceptable to those customers. This is
managed within the company by being alert to all the movements in the market place relating
to both products and suppliers and to negotiating with existing and prospective suppliers for the
supply of goods on the best possible terms to enable the company to trade effectively.
Where products are bought in foreign currency, the company manages the risk inherent in such
currencies by continuously updating its rates of conversion in calculating its costs to ensure prices
remain competitive and in order to minimise the currency conversion risk.
10
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 STRATEGIC REPORT (continued)
The Company recognises the importance of providing additional services to its customers in
relation to next day deliveries, credit limits, handling queries efficiently and maintaining a strong
relationship with the customer and in this way aims to resist the competitive pressures in the sector.
7. Future Prospects
Your board’s long term approach to investment decisions is well documented and often referenced
in these statements. This approach was continued in the last year as we invested in a significant
number of new staff who joined us with the necessary skills to develop our new focus categories
and help drive the business forward. This coupled with other investments in new vendors, customer
acquisition and our renewed strategy leave us excited about the revenue and margin opportunities
for the coming year as we continue on an accelerated path to recovery and profitability.
We see significant potential in both our existing vendors and categories and the new categories we
are developing and exploring. We will continue our customer-centric focus and ensuring that our
offering and service levels allow our customers to profitably grow their business and consequently
grow ours.
By order of the Board
J.P. Henry
Operations Director
27th October 2016
11
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER REPORT OF THE DIRECTORS
The directors have pleasure in presenting their report and the accounts for the year ended 30 June 2016.
The financial statements include the individual entity Northamber plc and its wholly owned subsidiary
Anitass Limited. Anitass Limited owns the freehold of the premises at Weybridge which is the group’s
distribution centre. The other subsidiaries of Northamber plc are dormant and not material to the
financial statements for the year to 30 June 2016.
Principal Activities
The group’s and company’s principal activities are those of specialist supply of computer hardware,
computer printers and peripheral products, computer telephony products and other electronic
transmission equipment.
Financial Risks
The group uses various financial instruments including cash, equity and various items such as trade
receivables and trade payables that arise directly from its operations. The existence of these instruments
exposed the group to a number of financial risks, the main ones being exchange rate risk, liquidity risk,
interest rate risk and credit risk. The directors review and agree policies for managing each of these risks
and these are summarised in the Strategic Report.
Corporate Governance
The Corporate Governance Report on pages 17 to 22 forms part of the Directors’ Report and is
incorporated into this report by reference.
Dividends
The following dividends were paid in the year ended 30 June 2016
Ordinary dividends
Previous year’s final dividend paid
Interim paid
2016
£’000
2015
£’000
85
28
113
84
84
168
The final proposed dividend of 0.1p (2015: 0.3p) will be paid on 18 January 2017 to all members on the
register at the close of business on 9 December 2016.
Directors
The current directors of the company are listed on page 24.
Share Capital
At 30 June 2016, the company had 28,158,735 (2015: 28,158,735) Ordinary shares of 1p each issued. The
shares have no special rights and there is no restriction on their voting rights.
The company repurchased no ordinary shares of 1p each in the year.
12
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
REPORT OF THE DIRECTORS (continued)
Substantial Shareholdings
The company has been notified that the following shareholders held beneficial interest of 3 per cent or
more of the company’s issued share capital at 30 June 2016.
Mr D.M. Phillips
BNY(OCS) Nominees Limited
Mr H.W. Matthews
Mr & Mrs J.Rockliff
Quiros Limited
Purchase of Own Shares
Ordinary Shares of 1p each
61.23%
11.24%
3.57%
3.55%
3.32%
At the end of the year, the directors had authority, under the shareholders’ resolutions of 15 December
2015 to purchase through the market 2,815,874 (2015: 2,815,874) of the company’s ordinary shares at
prices ranging between 1p and 105% (2015: 1p and 105%) of the average middle market quotations for
those shares as derived from the Daily Official List of the London Stock Exchange on the ten dealing
days immediately preceding the day on which the shares are contracted to be purchased. This authority
expires on 14 December 2016, the date of the next Annual General Meeting.
Auditors
A resolution to appoint Grant Thornton UK LLP as the group’s auditors will be proposed at the
forthcoming Annual General Meeting.
Social and Community Policy
The group has a policy of being socially responsible. To this end it treats all its stakeholders and its
neighbours in a fair and reasonable manner in that all its actions are designed to optimise the benefits
and minimise any aggravation to its employees, suppliers and customers as well as those in the
community generally. Operations are conducted in a business-like manner and any nuisance which
could possibly arise from such operations are pre-considered and minimised. Such matters as bulk
deliveries are scheduled to reduce to a minimum any local congestion and car parking is provided to
staff to avoid any on street parking causing any offence.
Environmental Policy
The main environmental matters arising from the company’s operations on the environment, apart
from the matters stated above relating to traffic, are packaging and waste. Due to the type of operation
carried out by the company, i.e. the distribution of computer related products to other than end users,
the need for packaging is crucial to the state and quality of the products eventually received by the end
user (the consumer). Although excess packaging is discouraged, the company is largely in the hands
of its suppliers regarding the packaging actually involved in selling products. Any surplus packaging
which remains with the company is disposed of in an environmentally considered manner. The company
attempts wherever possible to enforce, as one of its terms of trade with its suppliers, the undertaking to
dispose of waste and returned products in accordance with the regulations. Any waste produced by the
company is similarly disposed of.
Amendment of Articles of Association
Unless expressly specified to the contrary in the Articles, the Articles may be amended by a special
resolution of the company’s shareholders.
Appointment and Replacement of Directors
Unless otherwise determined by the company in general meeting, the directors shall not be fewer than
two or more than ten.
A director does not require any shareholding in the company as qualification shares and there is no
restriction on the age of a director.
13
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
REPORT OF THE DIRECTORS (continued)
Appointment and Replacement of Directors (continued)
A director may be appointed by the company by ordinary resolution, or by the board. A director
appointed by the board holds office only up to the date of the next following annual general meeting
and is then eligible for reappointment. The board or any committee authorised by the board may from
time to time appoint one or more directors to hold any employment or executive office for such period
and on such terms as they may determine and may also revoke or terminate such appointment.
At every annual general meeting of the company, whoever has been appointed by the board since
the last annual general meeting retires from office but is eligible for reappointment. One third of the
directors retire by rotation at each annual general meeting but they are eligible for reappointment. Any
non-executive, director who has been a director of the company for nine years or more, retires each year
but is eligible for reappointment.
Power of the Directors
Subject to the company’s Memorandum of Association, the Articles and any directions given by the
company by special resolution, the business of the company will be managed by the board who may
exercise all the powers of the company, whether relating to the management of the business or not.
In particular the board may exercise all the powers of the company to borrow money, to mortgage or
charge any of its undertaking, property or assets (present and future) and uncalled capital and to issue
debentures and other securities and to give security for any debt, liability or obligation of the company
or of a third party.
Contractual Relationships
By the nature of its business, the company has contractual relationships with virtually all of its suppliers.
Such contracts are entered into and terminated on a regular basis with new suppliers being taken on
and with some being terminated either by mutual consent or if, in the opinion of the company, they
are no longer viable. Because product development continues to change dramatically over a relatively
short period of time, such change is not only inevitable, it is also highly desirable to ensure that the
company continues to be able to meet the demands of its customers.
Similarly there are written contracts with all of the company’s customers so that they are fully aware
of our terms of trade and to safeguard as far as possible against any losses arising from trading with
them. During the year to 30 June 2016 there were no significant changes in either the terms of trade
encompassed within these contracts nor any significant change in the range and size of our customers.
There are no contractual arrangements which are considered essential to the business of the group.
Employees
Every effort is made to keep staff as fully informed as possible about the operations and progress of the
company. This is achieved through regular communication from the Operations Director to all staff and
from the CEO to the Operational Management team meetings.
The group encourages its staff to pursue career development and to that end has made available
resources for training courses including video and computer training aids.
Applications received from disabled persons are given full and equal consideration but are small in number
as our type of business does not seem to attract such applicants. The company fulfils its obligations towards
employees who are disabled or who become so whilst in the employment of the company.
By order of the Board
14
S. Yoganathan ACMA
Company Secretary
27 October 2016
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’ REMUNERATION
Remuneration Committee
The Remuneration Committee comprised the non-executive directors Mr R.F. Heath and Mr G.P. Walters,
with Mr R.F. Heath the chairman of the committee. This committee meets at least once a year and
decides the remuneration policy that applies to executive directors.
In setting the policy it considers a number of factors including:
(a)
(b)
(c)
the basic salaries and benefits available to executive directors of comparable companies;
the need to attract and retain directors of an appropriate calibre and experience; and
the need to ensure executive directors’ commitment to the continued success of the company by
means of incentive schemes.
The group’s remuneration policy for executive directors is to:
(a)
(b)
(c)
have regard to the directors’ experience and the nature and complexity of their work in order to
pay a competitive salary that attracts and retains management of the highest quality;
link individual remuneration packages to the company’s performance through target-related
bonuses which are not considered to be excessive in terms of salary;
provide employment-related benefits including the provision of a company car, life assurance,
insurance relating to the directors’ duties and medical insurance.
The final determination of an individual director’s remuneration is taken by the board as a whole but
with no director participating in the discussions, nor voting on his own remuneration package.
The non-executive directors each receive a fee for their services which is agreed by the Board following
recommendation by the chairman. The non-executive directors do not receive any pension or other
benefits from the company, nor do they participate in any of the bonus or incentive schemes.
When reviewing or amending remuneration arrangements the committee considers any impact on the
cost to the company, employee behaviour, stakeholders (including shareholders, governance bodies
and employees) best practice, corporate governance and market competitiveness.
Salaries and Benefits
The Remuneration Committee meets at least once a year in order to consider and set the remuneration
packages for executive directors. The remuneration packages are benchmarked to ensure comparability
with companies of a similar size and complexity. The bonuses have regard to personal performance
measured against pre-stated objectives and profitability of the company.
Share Options
There are no share option schemes in force in the group or company.
Contracts of Service
The two executive directors, Mr D.M. Phillips and Mr J.P. Henry, have service contracts. Both contracts
are one year rolling contracts and contain no specific provisions in relation to any termination payments
over and above the notice periods as stated below.
Mr D.M. Phillips
Mr J.P. Henry
- Notice period – six months
- Notice period – six months
The non-executive directors do not have service contracts with the company. The terms of their
appointment are reviewed by the board every two years.
15
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
REPORT TO SHAREHOLDERS BY THE BOARD ON DIRECTORS’ REMUNERATION
Directors’ Detailed Emoluments
Details of directors’ emoluments are as follows:
Executive
Mr D.M. Phillips
Mr J.P. Henry
Non-Executive
Mr R.F. Heath
Mr G.P. Walters
(from 22 February 2016)
Mr A.G.K. Hamilton
(Resigned on
12 January 2016)
Salaries and
Benefits
2016
2015
£’000 £’000
-
70
15
-
70
18
7
9
15
Benefits
Pension
Total
2016
2015
£’000 £’000
2016
2015
£’000 £’000
2016
2015
£’000 £’000
11
6
13
6
-
10
-
10
-
-
-
-
-
-
-
-
11
86
18
7
9
13
86
15
-
15
104
100
17
19
10
10
131
129
For the year ended 30 June 2016, Mr D.M. Phillips has waived £180,000 of his salary (2015: £180,000 was
waived).
Directors’ Interests
Interests in Shares
Directors in office at 30 June 2016 had the following beneficial interests in the shares of the company:
Ordinary Shares of 1p each
Mr D.M. Phillips
Mr R.F. Heath
Mr A.G.K. Hamilton
Mr J.P. Henry
Mr G.P. Walters
30 June 2016
17,243,055
5,000
-
-
-
30 June 2015
17,243,055
5,000
-
-
-
Between 30 June 2016 and 24 October 2016 there have been no changes in the interests of the above
named directors in the shares of the company.
The market price of the company’s shares at 24 October 2016 was 32.0p. The range of market prices
during the year was 31.0p to 44.0p
S. Yoganathan ACMA
By order of the Board
27 October 2016
16
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
CORPORATE GOVERNANCE
The Corporate Governance Report forms part of the Directors’ Report included here on pages 12 to 14.
The Group is committed to high ethical values and professionalism in all its activities. As an essential part
of this commitment the Group supports the highest standards in corporate governance. The Board is
accountable to the company’s shareholders for good governance and this statement and the Directors’
remuneration report describe how the principles of good governance set out in the UK Corporate
Governance Code, published by the Financial Reporting Council are applied within the company. We
do not comply with the UK Corporate Governance Code. However, we have reported on our Corporate
Governance arrangements by drawing upon best practice available, including those aspects of the UK
Corporate Governance Code we consider to be relevant to the company and best practice.
CORPORATE GOVERNANCE POLICY
The group’s policy on Corporate Governance is published on the group’s web site which is
www.northamber.com.
DIRECTORS
Board of Directors
The group is led and controlled through the Board of Directors, which during the year comprised two
executive and two non-executive directors. Biographical details of each director in office during the
year appear on page 24.
All directors have access to the advice and services of the company secretary and the board has
established a procedure whereby any director may seek independent professional advice in the
furtherance of his duties at the company’s expense. All directors are able to allocate sufficient time to
the company to discharge their responsibilities.
As required by the company’s articles of association, directors offer themselves for re-election at least
once every three years.
Non-Executive Directors
The board considers that the non-executive directors were independent throughout the year. The non-
executive directors actively contribute to the functioning of the board and bring a range of views and
experience from different fields.
As part of their role, the non executive directors constructively challenge and develop proposals on
strategy. The non executive directors scrutinise the performance of management in meeting agreed
goals and objectives and monitor the reporting of performance. They satisfy themselves on the integrity
of financial information and that financial controls and systems of risk management are robust and
defensible. They determine appropriate levels of remuneration of executive directors and have a prime
role in appointing and, where necessary, removing executive directors, and in succession planning.
The senior independent non executive director, as included in the biographical details on page 24, is
available to shareholders if they have concerns which contact through the normal channels of chairman
or other executive directors has failed to resolve or for which such contact is inappropriate.
17
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER CORPORATE GOVERNANCE (continued)
Main Board Responsibilities
The board meets formally at regular intervals during the year. Meetings are chaired by the executive
chairman. The board is responsible for the overall direction and strategy of the group to secure optimum
performance. The board has specified those areas of operations in the group which are specifically in its
domain and may not be delegated; these matters include:-
• determination of the group’s objectives and strategy
• all financial information which is published, including the interim results and management
statements and the annual report and all other corporate communications
• decisions and recommendations on dividends
• changes in the group’s business, its capital and corporate structure or its risk profile
• changes in the scope or operation of the group’s internal control structure
• all board changes or changes in the company secretary
• the remuneration policy of the senior executives
All board members receive weekly summary financial information and monthly management accounts.
All financial information which is to be published is also circulated for discussion and approval prior
to publication. Information on other matters, as required, is also circulated by the company secretary.
Any board member may request the company secretary to report on any specific matter and prepare
information for discussion at the board meetings.
The board of the company comprises only four members and whilst formal board meetings are held at
regular intervals, many of the matters are also discussed informally throughout the year. The operations
director normally chairs the operations committee of the company which holds weekly meetings. It is
at these meetings that the decisions of the board are communicated to the senior management who
also sit on the operations committee. It is also this forum which reports back, through the operations
director to the board, on the implementation of the decisions of the board. The operations committee
also raises matters which they consider should be communicated to the board on any aspect of the
business which comes within the matters reserved for the board.
Directors’ Attendance
The following table shows the attendance of directors at the board meetings held in the last year.
No of meetings:
Mr David Michael Phillips
Mr John Phelim Henry
Mr Reginald Frank Heath
Mr Geoffrey Paul Walters
Mr Alexander Gordon Kelso Hamilton
Board Meetings
5
4
5
3
2
18
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 CORPORATE GOVERNANCE (continued)
Board Committees
During the year the Audit Committee comprised of two non-executive directors, Mr R.F.Heath, Mr G.P.
Walters (Appointed on 22 February 2016) and Mr A.G.K. Hamilton (Resigned on 12 January 2016)
Audit Committee
The Audit Committee, currently chaired by Mr G.P. Walters, comprised the two non-executive directors,
both of whom are considered by the board to be independent and to have sufficient recent and relevant
financial experience to discharge the committee’s duties.
The board considers that the members of the audit committee have the required understanding of:-
• the principles of, content of and developments in financial reporting, including the applicable
accounting standards and statements of recommended practice,
• key aspects of the company’s operations, including corporate policies, financing and systems of
internal control
• matters that could influence or distort the presentation of accounts and key information
• the role of external auditors.
The primary function of the audit committee is to enable the board to monitor the integrity of the
company’s financial reports and manage the board’s relationship with the external auditors. Its other
functions include the review and monitoring of:-
• the financial reporting process
• the annual audit
• the effectiveness of the company’s internal controls and risk management
• the independence of the external auditors.
The audit committee reports to the board its findings identifying any matters which it considers requires
that action or improvement is required and makes recommendations on the steps to be taken.
The committee’s terms of reference include all relevant matters required by the Disclosure and
Transparency Rules and the relevant code provisions. The terms of reference of the audit committee
have been reviewed and are available on request by writing to the company secretary at the registered
address.
Overview of the Actions Taken by the Audit Committee to Discharge its Duties
During the year the audit committee:-
• reviewed the June 2016 annual report and financial statements and the December half yearly and
financial report. As part of the review the committee received a report from the external auditors
on their audit of the annual report and financial statements
• reviewed the effectiveness of the company’s internal controls
• reviewed and agreed the scope of the audit work to be undertaken by the external auditors
• agreed the fees to be paid to the external auditors for their audit of the 2016 report and financial
statements
• reviewed the whistle blowing procedures in place to enable staff to raise concerns in confidence
about possible wrongdoing
• considered the requirement for an internal audit function in the company and decided to
recommend to the board that such a function was not necessary at this stage
• recommended that the board reappoint the external auditors
19
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER CORPORATE GOVERNANCE (continued)
External Audit
The engagement and independence of external auditors is considered annually by the Audit Committee
before it recommends its selection to the board.
The Audit Committee concluded that it was in the best interests of the Group for the external auditors
to provide a number of non-audit services during the year due to their experience, expertise and
knowledge of the Group’s operations.
Auditor objectivity and independence was achieved by ensuring that personnel involved in the non-
audit work were not involved in the audit, and by ensuring that management took responsibility for all
decisions made.
The fees paid to the Auditors in the year are disclosed in Note 4 to the Group financial statements.
Grant Thornton also follows its own ethical guidelines and continually reviews its audit team to ensure
its independence is not compromised.
Remuneration Committee
At the year end the Remuneration Committee comprised both non-executive directors and was
chaired by Mr R.F. Heath. The committee meets at least once a year and is responsible for setting the
remuneration policy and annual salaries that apply to executive directors.
Operations Committee
The Operations Committee comprises the executive directors and certain senior business managers. It
meets weekly, and deals with the operational matters of the company other than those dealt with by
the Remuneration and Audit Committees or by the full board.
Board Effectiveness
The role of the board is to ensure that the company is managed to optimise the benefits to its stakeholders
including shareholders, staff, customers, suppliers and the community at large. To achieve this objective
the board reserves to itself certain matters such as the formulation of strategy, the assessment of risk,
and the setting of internal control systems. Certain areas of responsibility of the board are dealt with by
committees of the board such as the audit committee and the remuneration committee reporting back
to the main board. The implementation of the decisions of the main board is delegated to the senior
management of the company through the Operations Committee chaired by the operations director.
During the year the board reviewed each aspect of its role to ensure that it was fulfilling its role effectively
and that each director was individually making a full and effective contribution to the process. This was
carried out by the chairman reviewing the individual and collective contribution of the board members
against objectives and by the audit committee reviewing the performance of the chairman.
The result of that review was that, having reviewed each director’s contribution and the requirements
of the company as a whole, each director was effective and that the composition of the board was
appropriate and more than adequate for the time being.
20
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 CORPORATE GOVERNANCE (continued)
GOING CONCERN BASIS
The group’s activities together with the factors likely to affect its future development, performance and
position are set out in the Strategic Report and the Directors’ Report on pages 7 to 14. The financial
position of the group, its cash flow and its liquidity position are described in the Chairman’s Statement
on pages 5 to 6. In addition, the Strategic Report also includes the group’s objectives, policies and
processes for managing its capital; its financial risk management objectives; and its exposure to credit
risk and liquidity risk.
The group has considerable financial resources and established market profile and relationships with a
number of suppliers and customers. As a consequence, the directors believe that the company is well
placed to manage its business risks appropriately despite the current economic outlook.
After making enquiries, the directors have formed a judgement, at the time of approving the financial
statements, that there is a reasonable expectation that the company has adequate resources to continue
in operational existence for the foreseeable future. For this reason the directors continue to adopt the
going concern basis in preparing the financial statements.
RELATIONS WITH SHAREHOLDERS
The Directors are available to meet with the group’s institutional shareholders throughout the year at
request.
Notice of the Annual General Meeting (AGM) is circulated to all shareholders at least 21 days prior to the
meeting. Directors attend the AGM and will be available to answer shareholders’ questions.
ACCOUNTABILITY AND AUDIT
Financial Reporting
The board believes that its Annual Reports and financial statements represent a balanced and
understandable assessment of the company’s position and prospects whilst also complying with the
legal and regulatory requirements for financial reporting relevant to the company.
Internal Control
The board of directors has overall responsibility for the group’s systems of internal control and for
monitoring their effectiveness.
The board maintains full control and direction over appropriate strategic, financial, organisational
and compliance issues and has put in place an organisational structure with formally defined lines
of responsibilities and delegation of authority. There are established procedures for planning, capital
expenditure, information and reporting systems and for monitoring the company’s business and its
performance. The board has delegated to executive management the implementation of the systems
of internal control within an established framework that applies within the company.
The group’s control systems address key business and financial risks. The board considers the greatest
risks to be related to the realisable value of current assets, principally inventories and trade receivables.
Particular attention is paid to all matters relating to purchasing, inventories, revenues, trade receivables,
cash, capital expenditure and foreign exchange. Comprehensive documented procedures are used and
are available to all staff via the extensive computer system.
A system of control is designed to manage rather than eliminate the risk of failure to achieve business
objectives, and can only provide reasonable and not absolute assurance against material misstatement
or loss. As and when areas of improvement are brought to the attention of the board and management
steps are taken to further embed internal control and risk management into the operations of the business.
21
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER CORPORATE GOVERNANCE (continued)
The board has considered the need for internal audit but has decided that because of the size of the
group it cannot be justified at present.
A review of internal control was undertaken by the board in February 2016. The conclusion of this
review was that the systems and operations of the internal controls including financial, operational and
compliance controls remained effective and appropriate to the operations of the company.
Other Matters
The Directors have published the company’s Corporate Governance policies which the directors
consider are relevant to the company on the company’s website.
Induction programmes for new directors are specifically designed for each director as appointed as the
content varies depending on the background and experience of the appointee. There is therefore no
standard induction programme for new directors.
By order of the Board
S. Yoganathan ACMA
Company Secretary
27 October 2016
22
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that
law the directors have to prepare the group financial statements and have elected to prepare the
parent company financial statements in accordance with International Financial Reporting Standards
as adopted by the European Union (IFRSs). Under company law the directors must not approve the
financial statements unless they are satisfied that they give a true and fair view of the state of affairs and
profit or loss of the group and the company for that period. In preparing these financial statements, the
directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgments and accounting estimates that are reasonable and prudent;
• state whether applicable IFRSs have been followed, subject to any material departures disclosed
and explained in the financial statements;
• prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the company’s transactions and disclose with reasonable accuracy at any time the financial
position of the company and enable them to ensure that the financial statements and the remuneration
report comply with the Companies Act 2006. They are also responsible for safeguarding the assets of
the company and hence for taking reasonable steps for the prevention and detection of fraud and other
irregularities.
The directors confirm that:
•
in so far as each is aware there is no relevant audit information of which the company’s auditors
are unaware; and
• the directors have taken all steps that they ought to have taken as directors to make themselves
aware of any relevant audit information and to establish that the auditors are aware of that
information.
The directors are responsible for the maintenance and integrity of the corporate and financial information
included on the company’s website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other jurisdictions.
D.M. Phillips
Chairman
27 October 2016
23
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER DIRECTORS AND ADVISERS
Non-Executive Directors
Geoffrey Paul Walters *† (Age 64) ACA
(Appointed on 22 February 2016)
Non executive director.
Geoffrey Walters has a vast experience in a wide range of industries and he is a Non executive director of
South Kensington Consultants Ltd.
Alexander Gordon Kelso Hamilton *† (Age 71) FCA
(Resigned on 12 January 2016)
Senior independent non executive director.
Non executive director of Barloworld Ltd, Netbank Private Wealth Ltd and Petra Diamonds Ltd.
Gordon Hamilton was a partner in Deloitte & Touche LLP (and predecessor practices) for more than 30
years and retired as a senior audit partner in 2006.
Reginald Frank Heath *† (Age 75) FCIS, FIMI
Non executive director.
Reginald Heath has over 30 years’ experience in the motor trade, formerly being Director of Motor
Operations at Inchcape plc.
* Member of Remuneration Committee
† Member of Audit Committee
Executive Directors
David Michael Phillips (Age 71)
Executive chairman
David Phillips is the founder of Northamber plc and has been actively involved with the company since
its inception in the 1970s.
John Phelim Henry (Age 54)
Operations director
John Henry joined Northamber plc in 1992 in the Sales Department. He was promoted to Operations
Director in 2012.
Registered Office
Namber House
23 Davis Road
Chessington
Surrey
KT9 1HS
Registrars
Computershare Services plc
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
Registered Auditors
Grant Thornton UK LLP
Chartered Accountants
No.1 Dorset Street
Southampton
SO15 2DP
24
Bankers
Allied Irish Bank (GB)
Mayfair Branch
10 Berkeley Square
London
W1J 6AA
Barclays Bank plc
6 Clarence Street
Kingston upon Thames
Surrey
KT1 1NY
Nominated Advisor & Broker
Cantor Fitzgerald Europe
One Churchill Place
Canary Wharf
London
E14 5RB
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC
We have audited the financial statements of Northamber plc for the year ended 30 June 2016 which
comprise the group and parent company statement of financial position, the group and company
statement of comprehensive income, the group and parent company statements of cash flow, the group
and parent company statements of changes in equity and the related notes. The financial reporting
framework that has been applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part
16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Respective responsibilities of directors and auditor
As explained more fully in the Directors’ Responsibilities Statement set out on page 23, the directors
are responsible for the preparation of the financial statements and for being satisfied that they give
a true and fair view. Our responsibility is to audit and express an opinion on the financial statements
in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting
Council’s website at www.frc.org.uk/auditscopeukprivate.
Opinion on financial statements
In our opinion:
the financial statements give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 30 June 2016 and of the group’s and the group’s loss for the year then ended;
the financial statements have been properly prepared in accordance with IFRSs as adopted by the
European Union; and
the financial statements have been prepared in accordance with the requirements of the Companies
Act 2006.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic Report and Directors’ Report for the financial year
for which the financial statements are prepared is consistent with the financial statements.
25
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORTHAMBER PLC (continued)
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires
us to report to you if, in our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for
our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and
returns; or
certain disclosures of directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Mark Bishop
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Oxford
27 October 2016
26
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2016
Revenue
Cost of sales
Gross Profit
Distribution costs
Administrative costs
Loss from operations
Investment revenue
Loss before tax
Tax (charge)
Loss for the year and total comprehensive loss
Basic and diluted loss per ordinary share
Notes
3
2016
Total
£’000
2015
Total
£’000
61,844
(57,025)
65,452
(60,851)
4,819
4,601
(3,310)
(2,801)
(1,292)
59
(1,233)
-
(1,233)
(2,950)
(2,583)
(932)
46
(886)
(2)
(888)
(4.38)p
(3.15)p
4
6
7
9
27
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
At 30 June 2016
Share
Capital
£’000
Share
Premium
Account
£’000
Capital
Retained
Redemption Earnings
Total
Equity
Reserve
£’000
£’000
£’000
Balance at 1 July 2014
281
5,734
1,505
14,003
21,523
Dividends
Transactions with owners
Loss and total comprehensive loss for the year
-
-
-
-
-
-
-
-
-
(168)
(168)
(888)
(168)
(168)
(888)
Balance at 30 June 2015
281
5,734
1,505
12,947
20,467
Dividends
Transactions with owners
Loss and total comprehensive loss for the year
-
-
-
-
-
-
-
-
-
(113)
(113)
(1,233)
Balance at 30 June 2016
281
5,734
1,505
11,601
(113)
(113)
(1,233)
19,121
28
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
COMPANY STATEMENT OF CHANGES IN EQUITY
At 30 June 2016
Share
Capital
£’000
Share
Premium
Account
£’000
Capital
Retained
Redemption Earnings
Total
Equity
Reserve
£’000
£’000
£’000
Balance at 1 July 2014
281
5,734
1,505
13,012
20,532
Dividends
Transactions with owners
Loss and total comprehensive loss for the year
-
-
-
-
-
-
-
-
-
(168)
(168)
(1,354)
Balance at 30 June 2015
281
5,734
1,505
11,490
Dividends
Transactions with owners
Loss and total comprehensive loss for the year
-
-
-
-
-
-
-
-
-
(113)
(113)
(1,758)
Balance at 30 June 2016
281
5,734
1,505
9,619
(168)
(168)
(1,354)
19,010
(113)
(113)
(1,758)
17,139
29
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 30 June 2016
Non current assets
Property, plant and equipment
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Notes
10
12
13
14
2016
£’000
7,995
5,006
8,459
5,466
2015
£’000
8,129
4,519
10,176
5,441
18,931
20,136
26,926
28,265
15
(7,805)
(7,798)
(7,805)
(7,798)
19,121
20,467
16
281
5,734
1,505
11,601
281
5,734
1,505
12,947
Equity shareholders’ funds
19,121
20,467
The financial statements on pages 27 to 50 were approved by the board of directors on 27 October 2016
and were signed on its behalf by:
D.M. Phillips J.P. Henry
Chairman
Operations Director
30
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
COMPANY STATEMENT OF FINANCIAL POSITION
At 30 June 2016
Non current assets
Property, plant and equipment
Investments
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Share capital
Share premium account
Capital redemption reserve
Retained earnings
Notes
10
11
12
13
14
2016
£’000
1,810
6,588
8,398
5,006
8,458
5,426
2015
£’000
1,873
6,588
8,461
4,519
10,175
5,424
18,890
20,118
27,288
28,579
15
(10,149)
(9,569)
(10,149)
(9,569)
17,139
19,010
16
281
5,734
1,505
9,619
281
5,734
1,505
11,490
Equity shareholders’ funds
17,139
19,010
The financial statements on pages 27 to 50 were approved by the board of directors on 27 October 2016
and were signed on its behalf by:
D.M. Phillips J.P. Henry
Chairman
Operations Director
Company Registration number: 01499584
31
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2016
Cash from operating activities
Operating (loss) from continuing operations
Depreciation of property, plant and equipment
Operating (loss)/ profit before changes in working capital
Decrease/(increase) in inventories
Decrease in trade and other receivables
Increase)/ (decrease) in trade and other payables
Cash generated from operations
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Net cash from investing activities
Cash flows from financing activities
Dividends paid to equity shareholders
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2016
£’000
2015
£’000
(1,292)
167
(1,125)
(487)
1,716
7
111
-
111
59
(32)
27
(113)
(113)
25
5,441
5,466
(932)
247
(685)
534
1,513
(829)
533
(2)
531
46
(44)
2
(168)
(168)
365
5,076
5,441
32
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
COMPANY STATEMENT OF CASH FLOWS
For the year ended 30 June 2016
Cash from operating activities
Operating (loss) from continuing operations
Depreciation of property, plant and equipment
2016
£’000
(1,817)
95
2015
£’000
(1,395)
114
Operating (loss) before changes in working capital
(1,722)
(1,281)
Decrease/(increase) in inventories
Decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Cash generated from operations
Income taxes paid
Net cash from operating activities
Cash flows from investing activities
Interest received
Purchase of property, plant and equipment
Net cash from investing activities
Cash flows from financing activities
Dividends paid to equity shareholders
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
(487)
1,717
580
88
-
88
59
(32)
27
(113)
(113)
2
5,424
5,426
534
1,514
(248)
519
-
519
46
(44)
2
(168)
(168)
353
5,071
5,424
33
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1.
General information
Northamber plc is a company incorporated and domiciled in the United Kingdom under the
Companies Act 2006. The address of the registered office is given in the shareholder information
on page 52. The nature of the company’s operations and its principal activities are set out in the
Strategic Report and the Directors’ Report on pages 7 to 14.
2.
Significant accounting policies
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the EU.
The financial statements have been prepared under the historical cost basis.
The financial statements cover the individual entity Northamber plc and one subsidiary Anitass
Limited, all other subsidiaries are dormant and not material to the financial statements for the
year to 30 June 2016 or 30 June 2015.
The directors of Anitass Limited, the subsidiary of Northamber Plc, have claimed audit exemption,
for the year ended 30 June 2016 under Section 479A (Subsidiary Companies) of Companies Act
2006. The Board of Northamber PLC have provided a guarantee on behalf of the Parent Company
undertaking stating that it guarantees Anitass Limited under the section 479C of the Companies
Act 2006. Northamber Plc guarantees all outstanding liabilities to which Anitass Limited is subject
at 30 June 2016 until they are satisfied in full and the guarantee is enforceable against Northamber
Plc by any person to whom the subsidiary company is liable in respect of those liabilities
The principal accounting policies adopted are set out below.
Adoption of new and revised standards
The Group will apply relevant new standards from their effective date. The directors do not
anticipate that any of the standards and interpretations issued by the IASB and IFRIC that have an
effective date after the date of the financial statements will have a material impact on the Group’s
financial statements in the period of initial application.
IFRS 9 ‘Financial Instruments’ (2014)
The IASB recently released IFRS 9 ‘Financial Instruments’ (2014), representing the completion of its
project to replace IAS 39 ‘Financial Instruments: Recognition and Measurement’. The new standard
introduces extensive changes to IAS 39’s guidance on the classification and measurement of
financial assets and introduces a new ‘expected credit loss’ model for the impairment of financial
assets. IFRS 9 also provides new guidance on the application of hedge accounting.
The Group’s management have yet to assess the impact of IFRS 9 on these consolidated financial
statements. The new standard is required to be applied for annual reporting periods beginning
on or after 1 January 2018.
IFRS 15 ‘Revenue from Contracts with Customers’
IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 ‘Revenue’,
IAS 11 ‘Construction Contracts’, and several revenue-related Interpretations. The new standard
establishes a control-based revenue recognition model and provides additional guidance in many
areas not covered in detail under existing IFRSs, including how to account for arrangements with
multiple performance obligations, variable pricing, customer refund rights, supplier repurchase
options, and other common complexities.
34
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
IFRS 15 is effective for reporting periods beginning on or after 1 January 2017. The Group’s
management have not yet assessed the impact of IFRS 15 on these consolidated financial
statements.
Key sources of estimation uncertainty and critical accounting judgements
Estimation uncertainty
Inventories
Initial measurement of inventories is at cost. Subsequent to initial recognition the group measures
inventories at the lower of cost and net realisable value. Impairment losses are recognised as and
when they occur. The write down is determined on an item by item basis or based on a group of
items where such an assessment is not practical.
Receivables
Provision against trade receivables is made when there is objective evidence that the Group
will not be able to collect all amounts due to it in accordance with the original terms of those
receivables. The amount of the write-down is determined as the difference between the asset’s
carrying amount and the present value of estimated future cash flows.
Critical accounting judgements
The directors do not consider there to be any critical accounting judgements.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable and represents
amounts receivable for goods provided in the normal course of business, net of discounts, VAT
and other sales related taxes.
Sales of goods are recognised when goods are delivered and title has passed.
Investment revenue is accrued on a time basis in accordance with the effective interest rate
method.
Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all
the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
The Company as lessee
Rentals payable under operating leases are charged to profit or loss on a straight line basis over
the term of the relevant lease.
Benefits received and receivable as an incentive to enter into an operating lease are also spread
on a straight line basis over the lease term.
35
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Foreign currencies
Transactions in currencies other than pounds sterling, the functional currency of all group entities,
are recorded at the rates of exchange prevailing on the date of the transactions. At each reporting
date, monetary assets and liabilities that are denominated in foreign currencies are retranslated
at the rates prevailing on the reporting date. Exchange differences arising on the settlement of
monetary items, and on the retranslation of monetary items, are included in profit or loss for the
period.
Loss from operations
Loss from operations is stated before investment income and finance costs.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an expense in the
period in which they are incurred. The Group has no defined benefit retirement schemes.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on the taxable profit for the year. Taxable profit differs from
net profit as reported in the profit or loss because it excludes items of income or expense that
are taxable or deductible in other years and it further excludes items that are never taxable or
deductible. The company’s liability for current tax is calculated using tax rates that have been
enacted, or substantially enacted, by the reporting date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used
in the computation of taxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such assets and liabilities are
not recognised if the temporary differences arise from the initial recognition of goodwill or from
the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are substantially enacted in the period when the
liability is settled or the asset is realised. Deferred tax is charged or credited to the profit or loss,
except when it relates to items charged or credited directly to equity, in which case the deferred
tax is also dealt with in equity.
Deferred tax balances have not been discounted.
Property, plant and equipment
Land and buildings are held for use in the production or supply of goods and services, or for
administrative purposes and are stated in the balance sheet at cost less accumulated depreciation
and impairment losses.
36
Fixtures and equipment are stated at cost less accumulated depreciation and any recognised
impairment loss.
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Depreciation is charged so as to write off the cost of assets less any residual value, other than land,
over their estimated useful lives, using the straight line method, on the following bases:
Land and Buildings:
Freehold premises
4% on freehold buildings, freehold improvements 25% straight line
Plant and equipment
25% straight line
The gain or loss arising on the disposal or retirement of an asset is determined as the difference
between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Material residual value estimates are updated as required, but at least annually.
Impairment of tangible assets
At each balance sheet date, the group reviews the carrying amounts of its tangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does not generate cash flows that
are independent from other assets, the Company estimates the recoverable amount of the cash
generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash generating unit) is reduced to its
recoverable amount. An impairment loss is recognised as an expense immediately, unless the
relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash
generating unit) is increased to the revised estimate of its recoverable amount, but so that
the increased carrying amount does not exceed the carrying amount that would have been
determined had no impairment loss been recognised for the asset (cash generating unit) in prior
years. A reversal of an impairment loss is recognised as income immediately, unless the relevant
asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated
as a revaluation increase.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is on the FIFO basis and
comprises direct materials. Net realisable value represents the estimated selling price less costs
to be incurred in marketing, selling and distribution.
Cost of inventories is based on original cost as amended by credits subsequently received or
agreed with suppliers in respect of specific products. The provision for obsolete and slow moving
stock is determined by frequent and regular reviews of stock, its ageing and rate of sale, provisions
are made which enable such obsolete stock as not returned to suppliers and slow moving stock
to be sold at no loss.
Consignment stock
Consignment stock is not recorded since the risks and benefits associated with the consignment
stock do not pass to the Company. Company held consignment stock on behalf of vendors and
the legal title does not generally pass to the Company until the sale to the end customer by the
Company. This is as per the specified terms in the contracts with the vendors.
37
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Investments
Investment in subsidiaries is held at cost less any provision for impairment.
Financial instruments
Financial assets are classified as loans and receivables. Loans and receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an active market. Loans
and receivables include trade receivables, cash and cash equivalents and are initially recognised
at fair value plus transaction costs. Loans and receivables are measured subsequent to initial
recognition at amortised cost using the effective interest method, less provision for impairment.
Any change in their value through impairment or reversal of impairment is recognised in profit
or loss.
Provision against trade receivables is made when there is objective evidence that the company
will not be able to collect all amounts due to it in accordance with the original terms of those
receivables. The amount of the write-down is determined as the difference between the asset’s
carrying amount and the present value of estimated future cash flows discounted at the original
effective interest rate.
An assessment for impairment is undertaken at least at each reporting date.
A financial asset is derecognised only where the contractual rights to the cash flows from the
asset expire or the financial asset is transferred and that transfer qualifies for derecognition. A
financial asset is transferred if the contractual rights to receive the cash flows of the asset have
been transferred or the company retains the contractual rights to receive the cash flows of the
asset but assumes a contractual obligation to pay the cash flows to one or more recipients. A
financial asset that is transferred qualifies for derecognition if the company transfers substantially
all the risks and rewards of ownership of the asset, or if the company neither retains nor transfers
substantially all the risks and rewards of ownership but does transfer control of that asset.
Financial liabilities
Financial liabilities are obligations to pay cash or other financial assets and are recognised when
the company becomes a party to the contractual provisions of the instrument. Financial liabilities
are initially recognised at fair value plus transaction costs. Financial liabilities subsequent to initial
recognition are recorded at amortised cost using the effective interest method, with interest
related charges recognised as an expense in finance charges in the income statement. Finance
charges, including premiums payable on settlement or redemption and direct issue costs, are
charged to the income statement on an accruals basis using effective interest method and
are added to the carrying amount of the instrument to the extent that they are not settled in
the period in which they arise. A financial liability is derecognised only when the obligation is
extinguished, that is, when the obligation is discharged or cancelled or expires.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and highly liquid investments
that are readily convertible into known amounts of cash and which are subject to an insignificant
risk of changes in value.
Equity
Equity comprises the following:
38
Share Capital
Share Premium
– represents the nominal value of equity shares.
– represents the excess over nominal value of the fair value of consideration
received for equity shares, net of expenses of the share issue.
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Capital Redemption Reserve
Retained Earnings
– represents the nominal value of shares which have been
redeemed and cancelled.
– represents all current and prior period retained profits
and losses.
The transaction costs of an equity transaction are accounted for as a deduction from equity
(net of any related income tax benefit) to the extent that they are incremental costs directly
attributable to the equity transaction that otherwise would have been avoided. The costs of an
equity transaction that is abandoned are recognised as an expense.
Capital management
The Group manages its equity as capital. The company’s policy is to not have external debt
finance and pay dividends as appropriate whilst maximising the long term return to stakeholders.
In line with Group policy, the group has no external debt finance hence gearing is not measured.
The company have paid final and interim dividends in the year.
Equity comprises the items detailed within the principal accounting policy for equity and financial
details can be found in the statement of financial position. The company adheres to the capital
maintenance requirements set out in the Companies Act.
Going Concern basis
The going concern basis of preparing the financial statements has been adopted as in the view
of the directors, as set out in the notes on Corporate Governance, the company has adequate
resources to continue in operational existence for the foreseeable future.
3.
Segmental reporting
Management has determined that there is only one operating segment of the group as the total
business of the company is the sourcing and distribution of computer related products and this
is how information is reported to the Chief Operating Decision Maker. The board in carrying out
its strategic planning and decision making has, necessarily, to take consideration of the inter
relatedness of the product range and the customer base and thus treat the operations of the
group as a whole. All decisions on the allocation of resources impacts on all aspects of the group.
Information presented to the Chief Operating Decision Maker is the same as is reported in these
financial statements.
Although the sales of the group are predominantly to the UK there are sales to other countries
and the following schedule sets out the split of the sales for the year. Revenue is attributable
to individual countries based on the location of the customer. There are no non current assets
outside the UK.
Year to 30 June 2015
Total Segment revenue
Year to 30 June 2016
Total Segment revenue
UK
£’000
65,226
61,615
Other
£’000
226
229
Total
£’000
65,452
61,844
One customer accounted for more than 10% (2015: 10%) of the group’s revenue for the year,
being £8.6m (2015:£11.8m).
39
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
4.
Loss from operations
Operating loss is stated after (crediting)/charging:
Foreign exchange loss
Depreciation of property, plant and equipment
Amounts written off inventory
(Profit) on disposal of property, plant and equipment
Operating lease charges – land and buildings
Fees paid to the company’s auditor
for the audit of the company annual financial statements
for non-audit services
2016
£’000
24
167
18
-
6
42
4
2015
£’000
11
247
49
-
6
42
4
No profit and loss account for Northamber plc has been presented as permitted by Section 408
of the Companies Act 2006.
The retained loss for the financial year dealt within the financial statements of the parent company,
Northamber plc, was £1,871,000 (2015: loss of £1,354,000) and is stated after taxation.
5.
Staff costs
The average monthly number of persons (including executive directors) employed by the
company during the year was:
Sales
Administration
Warehouse
Engineering
Their aggregate remuneration comprised:
Staff costs:
Wages and salaries
Social security costs
Other pension costs
2016
£’000
41
33
17
2
93
2016
£’000
3220
338
84
3642
2015
£’000
32
37
18
2
89
2015
£’000
2,851
297
81
3,229
40
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Included in the above is key management personnel compensation of £131,000 (2015: £129,000).
Full details of director’s remuneration are set out in the Report to Shareholders by the Board on
Directors’ Remuneration on page 16. The company has identified the key management personnel
as the executive and non-executive directors and all their remuneration received amounts to
short-term employment benefits.
6.
Investment revenue
Bank interest receivable
Other interest receivable
Rental income
7.
Tax on loss/profit on ordinary activities
Burrent taxation
UK corporation tax: credit for the year
Adjustment in respect of prior periods
Loss relief against prior year
Deferred tax:
Credit for the year
Charge for the year
Group
Group
2016
£’000
30
-
29
59
2016
£’000
-
-
-
-
-
2015
£’000
26
-
20
46
2015
£’000
-
2
-
-
2
The charge for the year can be reconciled to the profit per the Statement of comprehensive
income as follows:
Loss on ordinary activities before tax
Group
2016
£’000
(1,233)
Tax at the UK corporation tax rate of 20% average (2015:20.75%)
(247)
Other differences
Adjust closing deferred tax rate
Adjustment in respect of prior periods
Deferred tax asset not recognised
Total actual amount of charge for the year
31
63
-
153
-
The Group has tax losses of £3,128,600 (2015: £2,085,000) to carry forward.
2015
£’000
(886)
(184)
12
29
2
139
2
41
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
8.
Dividends
Amounts recognised as distribution to equity holders in the period:
Dividends paid in year
Final – for year ended 30 June 2015
Interim – for year ended 30 June 2016
2016
2015
Pence
Per Share
0.30
0.10
0.40
£’000
85
28
113
Pence
Per Share
0.30
0.30
0.60
£’000
84
84
168
Proposed final for the year ended 30 June 2016
0.10
28
0.30
84
The proposed final dividend is subject to approval at the Annual General Meeting and has not
been included as a liability in these financial statements.
9.
Loss per ordinary share
The calculation of the basic and diluted earnings per share is based on the following data:
Loss for the year attributable to equity holders of the parent company
(1,233)
2016
£’000
2015
£’000
(888)
Number of shares
2016
Number
2015
Number
Weighted average number of ordinary shares for the purpose of basic
earnings per share and diluted earnings per share
28,158,735 28,158,735
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders
by the weighted average number of ordinary shares in issue during the year. Both basic and
diluted earnings per share have been calculated using the loss attributable to shareholders of the
parent company as the numerator; therefore no adjustments to loss were necessary in 2015 and
2016.
Net Assets per share, as disclosed within the summary of the last five years of trading, is calculated
by dividing the net assets as disclosed in the consolidated statement of financial position by the
number of ordinary shares in issue at the year end.
42
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
10. Property, plant and equipment
Group
Cost
At 1 July 2014
Additions
Disposals
At 30 June 2015
Depreciation
At 1 July 2014
Depreciation charge for the year
Disposals
At 30 June 2015
Net book value at 30 June 2015
Group
Cost
At 1 July 2015
Additions
Disposals
At 30 June 2016
Depreciation
At 1 July 2015
Depreciation charge for the year
Disposals
At 30 June 2016
Net book value at 30 June 2016
Land and
Buildings
£’000
Plant and
Equipment
£’000
9,252
-
-
9,252
1,012
189
-
1,201
8,051
9,252
-
-
9,252
1,201
128
-
1,329
7,923
1,393
44
-
1,437
1,300
58
-
1,358
79
1,437
32
-
1,469
1,358
39
-
1,397
72
Total
£’000
10,645
44
-
10,689
2,312
247
-
2,560
8,129
10,689
32
-
10,721
2,560
167
-
2,727
7,995
The directors obtained independent valuations on the land and buildings made on a going
concern basis for existing use terms. The valuer has assessed the fair value of the land and
buildings held by the company to be £9,150,000 (2015: £9,000,000), which exceeds the carrying
amount by £1,227,000 (2015: £949,000).
43
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Company
Cost
At 1 July 2014
Additions
Disposals
At 30 June 2015
Depreciation
At 1 July 2014
Depreciation charge for the year
Disposals
At 30 June 2015
Net book value at 30 June 2015
Company
Cost
At 1 July 2015
Additions
Disposals
At 30 June 2016
Depreciation
At 1 July 2015
Depreciation charge for the year
Disposals
At 30 June 2016
Net book value at 30 June 2016
Land and
Buildings
£’000
Plant and
Equipment
£’000
2,573
-
-
2,573
723
56
-
779
1,794
2,573
-
-
2,573
779
56
-
835
1,738
1,393
44
-
1,437
1,300
58
-
1,358
79
1,437
32
-
1,469
1,358
39
-
1,397
72
Total
£’000
3,966
44
-
4,010
2,023
114
-
2,137
1,873
4,010
32
-
4,042
2,137
95
-
2,232
1,810
44
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
11.
Investment in group companies
Company
Cost
At 1 July 2015 and 30 June 2016
Total
£’000
6,588
In the opinion of the directors, the value of the company’s investment is not less than the amount
included in the company statement of financial position. The investment relates to Anitass Limited.
Name
Anitass Limited
Solution Point Limited
Solution Technology Limited
Thripple-Thrift Limited
Country of Incorporation
England
England
England
England
% owned
100
99
100
100
Status
Operational
Dormant
Dormant
Dormant
12.
Inventories
Group and Company
2015
2015
£’000
£’000
Goods for resale
5,006
4,519
Cost of sales include £56,887,000 (2015:£60,703,000) inventory expensed in the year’s statement
of comprehensive income. In the opinion of the directors, the net realisable value of inventories
held at 30 June 2016 against which provision has been made was £4,822,000 net of the provision.
(2015: £3,819,000).
13. Trade and other receivables
Group
2016
£’000
2015
£’000
Trade receivables
Less provision for impairment of receivables
8,384
(80)
10,096
(57)
Company
2016
£’000
2015
£’000
8,384
(80)
10,096
(57)
Net trade receivables
8,304
10,039
8,304
10,039
Other receivables
Prepayments
48
107
69
68
8,459
10,176
47
107
68
68
8,458
10,175
An allowance has been made for estimated at risk amounts from the sale of goods of £80,000
(2015: £57,000). The allowance has been determined by assessing each individual debtor as well
as making assessments based on past experience and knowledge of the customers and the
prevailing economic conditions.
The group is exposed to credit risk on its trade and other receivables due to the credit terms
offered to its customers. In the opinion of the directors there is no particular credit risk in any one
customer. It is confirmed that the fair value of trade receivables is not materially different from the
carrying value. Trade receivables are not interest bearing.
45
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
The average days credit is 41 days (2015: 47 days). The company uses a rigorous and detailed
assessment of each prospective customer before supplying goods up to a pre-determined credit
level, and customers are regularly re-assessed to determine current levels of credit limits.
In the opinion of the directors the provision made for bad debts, as shown below, is appropriate
and that no further provision is required. In the opinion of the directors the fair value of the trade
receivables is not materially different from the amounts disclosed.
All financial assets that are neither past due nor impaired are considered to be fully recoverable.
Trade receivables older than credit terms
Ageing of past due but not impaired receivables is as follows
30 - 60 days past due
60 - 90 days past due
90+ days past due
Total
Group and Company
2016
£’000
262
21
122
405
2015
£’000
175
16
43
234
As at 30 June 2016 trade receivables of £80,000 (2015: £57,000) were impaired: the ageing of these
trade receivables was
30 - 60 days past due
60 - 90 days past due
90+ days past due
Total
Group and Company
2016
£’000
-
17
63
80
2015
£’000
-
20
37
57
Trade and other receivables allowance for doubtful debts
Balance at beginning of period
Amounts written off as uncollectable
Potential impairment increase/(reduction)
Total
Group and Company
2016
£’000
57
(8)
31
80
2015
£’000
79
-
(22)
57
The other classes within trade and other receivables do not contain impaired assets. The maximum
exposure to credit risk at the reporting date is the carrying value of each class of receivable
mentioned above. The group does not hold any collateral as security.
46
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
14. Cash and cash equivalents
Group
2016
£’000
2015
£’000
Company
2016
£’000
2015
£’000
Bank balances and cash in hand
5,466
5,441
5,426
5,424
Cash and cash equivalents in statement of cash flows
5,466
5,441
5,426
5,424
15. Trade and other payables
Trade payables
Inter group payables
Other payables
VAT
Other tax and social security
Accruals and deferred income
Group
2016
£’000
2015
£’000
7,162
-
38
290
93
222
6,848
-
36
608
84
222
Company
2016
£’000
2015
£’000
7,162
2,376
38
269
93
211
6,848
1,805
36
578
84
218
7,805
7,798
10,149
9,569
The financial liabilities shown above are those which were outstanding at 30 June 2016. The
average credit period taken for trade payables is 38 days (2015: 34 days).
The directors consider that the fair values of trade and other payables are not materially different
from those disclosed above. Trade payables are not interest bearing.
The liquidity in trade and other payables is managed by the company through the management
of its cash resources as referred to in the Strategic Report, to ensure that for all practical purposes
creditors are paid in accordance with the credit terms agreed with the suppliers.
47
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
16. Share capital Group and Company
At 30 June 2016 and 2015
Number
80,000,000
£’000
2,000
Issued and fully paid shares of 1p each
At 30 June 2016 and 2015
28,158,735
281
The company has one class of ordinary shares which carry no right to fixed income.
17. Capital commitments
There were no capital commitments at 30 June 2016 (2015: £Nil).
18. Operating lease arrangements
Minimum lease payments under operating
leases recognised in profit or loss for the year
Group
2016
£’000
2015
£’000
Company
2016
£’000
2015
£’000
6
6
607
607
At 30 June 2016, the group had commitments for future minimum lease payments under non-
cancellable operating leases, which fall due as follows:
One year
Between one and five years
Group
2016
£’000
2015
£’000
6
6
12
6
6
12
Company
2016
£’000
2015
£’000
607
757
607
757
1,364
1,364
The freehold of the warehouse was purchased on 23 April 2012 by Anitass Limited, a 100% subsidiary
of Northamber plc.
48
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
19. Related party transactions
Mr D.M. Phillips is the ultimate controlling party of the company.
During the year, the company paid £601,000 (2015: £601,000) rent to Anitass Limited, a wholly
owned subsidiary. At the year end Northamber plc owed Anitass Ltd £2,376,000 (2015: £1,804,000).
At the year end, £0.41 million (2015: £0.59 million) was held by the company on Mr D.M. Philips’
behalf.
Interest of £4,594 (2015: £10,909) earned during the year, is included within the balance of £0.41
million (2015: £0.59 million).
20. Post balance sheet events
There were no material post balance sheet events, adjusting or non-adjusting.
21. Contingent liabilities
During the year to 30 June 2007, the company granted a 175 year lease for an enterprise zone
investment property in Arbroath.
The company retains the freehold interest, which has a negligible value, and a contingent liability
of £702,000 exists in respect of the clawback of enterprise zone tax allowances which will only
occur if the retained freehold interest is disposed of before 2017. The directors believe that any
realisation of this liability has an extremely low level of probability.
22. Financial instruments exposure
The interest rate exposure of the financial assets and liabilities of the group and company as at 30
June 2016 is shown in the table below. The table includes trade receivables and payables as these
do not attract interest and are therefore subject to fair value interest rate risk.
Based on exposure at the reporting date, currency movements are not considered likely to have
a material effect on profits or equity.
Note 13 above refers to further matters relating to credit risk as does the Strategic Report under
the heading of Financial Risk.
Group
Financial assets – loans and receivables
Cash and cash equivalents:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Trade and other receivables
Total
Floating
£’000
4,784
548
134
-
5,466
Zero
£’000
-
-
-
8,459
8,459
Total
£’000
4,784
548
134
8,459
13,925
49
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER
NORTHAMBER PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Financial liabilities at amortised cost
Trade payables:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Other payables
Total
Company
Financial assets – loans and receivables
Cash and cash equivalents:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Trade and other receivables
Total
Financial liabilities at amortised cost
Trade payables:
Sterling
US Dollars (Sterling equivalent)
Euros (Sterling equivalent)
Other payables
Total
Floating
£’000
-
-
-
-
-
Zero
£’000
5,652
1,401
109
38
7,200
Floating
£’000
Zero
£’000
4,744
548
134
-
5,426
-
-
-
8,458
8,458
Floating
£’000
Zero
£’000
-
-
-
-
-
5,652
1,401
109
38
7,200
Total
£’000
5,652
1,401
109
38
7,200
Total
£’000
4,744
548
134
8,458
13,884
Total
£’000
5,652
1,401
109
38
7,200
The directors estimate that an increase or decrease in annual average interest rates of 0.5% would
increase/decrease profit before tax by approximately £27,000 (2015: £26,000).
Type of Financial Instrument
All financial assets are classified as loans and receivables and all financial liabilities are held at
amortised cost.
Maturity of Financial Instruments
All financial liabilities are classified as current and are due within 60 days.
50
NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NOTICE OF MEETING
Notice is hereby given that the Annual General Meeting of Northamber plc will be held at 23 Davis Road,
Chessington, Surrey KT9 1HS on 14 December 2016 at 12 noon for the following purposes:-
1.
2.
3.
4.
5.
6.
7.
To receive and adopt the company’s accounts for the year ended 30 June 2016 and the directors’
and auditors’ reports thereon.
To propose the following ordinary resolution: That the directors’ remuneration report for the year
ended 30 June 2016 be received and approved.
To declare a dividend on the ordinary shares of the company.
Re-elect Mr J.P. Henry as a director.
Re-elect Mr D.M. Phillips as a director.
Elect Mr G.P. Walters as a director
To re-appoint Grant Thornton UK as auditors and to authorise the directors to fix their remuneration.
ORDINARY RESOLUTION
8.
THAT, the directors be generally and unconditionally authorised to allot equity securities (as
defined by Section 560 of the Companies Act 2006 (“the Act”), up to an aggregate nominal
amount of £187,725 (such amount to be reduced by the nominal amount of any Relevant Securities
allotted under paragraph 10 below) in connection with an offer by way of a rights issue:
(a) to holders of ordinary shares in proportion (as nearly as may be practicable) to their respective
holdings; and
(b) to holders of other equity securities as required by the rights of those securities or as the
directors otherwise consider necessary, but subject to such exclusions or other arrangements
as the board may deem necessary or expedient in relation to treasury shares, fractional
entitlements, record dates, legal or practical problems in or under the laws of any territory or
the requirements of any regulatory body or stock exchange;
SPECIAL RESOLUTIONS
9
THAT, the directors be authorised to allot equity securities pursuant to Resolution 8 above up to
an aggregate nominal amount of £93,862 as if Section 561 of the Companies Act 2006 (existing
shareholders’ rights of pre-emption)
(a) did not apply to the allotment, or
(b) applied to the allotment with such modifications as the directors may determine
(c). provided that this authority shall, unless renewed, varied or revoked by the company, expire
on the 12 March 2018 or, if earlier, the date of the next Annual General Meeting of the company
save that the company may, before such expiry, make offers or agreements which would or
might require equity securities to be allotted and the directors may allot equity securities in
pursuance of such offer or agreement notwithstanding that the authority conferred by this
resolution has expired.
10
THAT the company be and is hereby unconditionally and generally authorised to make market
purchases (within the meaning of Section 693(4) of the Companies Act 2006 of ordinary shares of
1p in the capital of the company, provided that:
(a) the maximum number of shares hereby authorised to be acquired is 2,815,874 representing 10
per cent of the present issued share capital;
(b) the minimum price which may be paid for such shares is 1p per share (exclusive of all expenses);
(c) the maximum price which may be paid for such shares is, in respect of a share contracted to be
purchased on any day, an amount (exclusive of expenses) equal to 105 per cent of the average
middle market quotations of the ordinary shares of the company as derived from the Daily
Official List of The London Stock Exchange on the 10 dealing days immediately preceding the
day on which the shares are contracted to be purchased;
51
REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016 | NORTHAMBER NORTHAMBER | REPORT & ACCOUNTS FULL YEAR ENDED 30 JUNE 2016
NOTICE OF MEETING (continued)
(d) the authority hereby conferred shall (subject to sub-clause (e) below) expire on the date of the
next Annual General Meeting of the company after the passing of this resolution; and
(e) the company may make a contract to purchase its own shares under the authority hereby
conferred prior to the expiry of such authority which will, or may be, executed wholly or partly
after the expiry of such authority, and may make a purchase of its own shares in pursuance of
any such contracts.
By Order of the Board
S. Yoganathan
Company Secretary
Registered Office:
Namber House
23 Davis Road,
Chessington,
Surrey,
KT9 1HS
Notes:
(1)
(2)
(3)
A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and,
on a poll, vote instead of him or her. A proxy need not be a member of the company. Completion
and return of a form of proxy will not prevent a member from attending and voting at the meeting.
The instrument appointing a proxy and the power of attorney (if any) under which it is signed
must be deposited at the offices of the registrars of the company, not less than forty-eight hours
before the time of the meeting.
There will be available for inspection at the registered office of the company during normal
business hours from the date of this Notice until the date of the Annual General Meeting and,
at the place of the Annual General Meeting, from at least fifteen minutes prior to and until the
conclusion of the Annual General Meeting:
(a) copies of the executive directors’ service agreements with the company; and
(b) the Register of Directors’ Interests.
52
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THIS PAGE IS INTENTIONALLY LEFT BLANK
Northamber plc • Namber House • 23 Davis Road • Chessington • Surrey • KT9 1HS
UK Telephone: (+44) 020 8296 7000 • Fax: (+44) 020 8296 7060 • www.northamber.com